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Medicare Advantage risk adjustment for health plans

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2024 Sweeping Changes to Medicare Advantage Risk Adjustment for Health Plans


The 724-page final rule was published in the Federal Register on April 12, and the primary purpose of this final rule is to amend the regulations for the Medicare Advantage (Part C), Medicare Cost Plan, and Medicare Prescription Drug Benefit (Part D) programs, and Programs of All-Inclusive Care for the Elderly (PACE). This final rule includes new policies to improve Medicare Advantage risk adjustment aspects and codify existing Part C and Part D sub-regulatory guidance.

Additionally, this rule implements certain sections of the following Federal laws related to the Parts C and D programs:

1. The Inflation Reduction Act (IRA) of 2022.

2. The Consolidated Appropriations Act (CAA), 2021.

This final rule will revise the Medicare Advantage (Part C), Medicare Prescription Drug Benefit (Part D), Medicare cost plan, and Programs of All-Inclusive Care for the Elderly (PACE) regulations to implement changes related to Star Ratings, marketing and communications, health equity, provider directories, coverage criteria, prior authorization, passive enrollment, network adequacy, and other programmatic areas. This final rule will also codify regulations implementing section 118 of Division CC of the Consolidated Appropriations Act, 2021, section 11404 of the Inflation Reduction Act, and includes provisions that will codify existing sub-regulatory guidance in the Part C, Part D, and PACE programs.

Furthermore, this regulation enacts specific provisions of the Inflation Reduction Act (IRA) of 2022 and the Consolidated Appropriations Act (CAA) 2021 about Parts C and D programs. The ultimate objective is to amend the regulations associated with Medicare Advantage (Part C), Medicare Prescription Drug Benefit (Part D), Medicare cost plan, and Programs of All-Inclusive Care for the Elderly (PACE). The revisions cover Star Ratings, marketing and communications, health equity, provider directories, coverage criteria, prior authorization, passive enrollment, network adequacy, and the Medicare Advantage risk adjustment model. Additionally, the final rule formalizes regulations implementing section 118 of Division CC of the Consolidated Appropriations Act, 2021, section 11404 of the Inflation Reduction Act. It incorporates provisions to codify existing sub-regulatory guidance within the Part C, D, and PACE programs.

Following are the regulations that are subject to proposed changes of the Final rule


CMS has implemented new methodological enhancements to the Star rating program to drive further improvements in quality. One notable change is the introduction of a health equity index reward, effective from the 2027 Star ratings, which will recognize Medicare Advantage (MA) and Medicare Part D plans that deliver exceptional care to underserved populations with low-risk scores as per Medicare Advantage Risk Adjustment calculations. Plans are now mandated to offer culturally competent care to a broader range of populations, and they must enhance equitable access to care for individuals with limited English proficiency by fulfilling expanded requirements for providing materials in alternative formats and languages.

To align more closely with other CMS quality programs and the existing CMS Quality Strategy, CMS has reduced the weight assigned to patient experience/complaints and access measures, which may affect  Additionally, an extra provision has been introduced for the removal of Star rating measures and the 60 percent rule associated with the adjustment for extreme and uncontrollable circumstances has been eliminated.

2) Restrain deceptive marketing in Medicare Advantage.

CMS has implemented measures to protect seniors from misleading marketing practices related to Medicare Advantage (MA) and Part D coverage. The regulations prohibit advertisements that lack specificity about a particular plan name and deceptive use of the Medicare or CMS logo. This response addresses concerns about certain TV ads promoting MA plans that could confuse beneficiaries.

The final rule also strengthens oversight of agents and brokers, emphasizing the need to provide accurate information to beneficiaries and promoting awareness of alternative information sources. Of the 22 proposed provisions in December, 21 have been finalized, with modifications to four key provisions. These modifications include allowing agents to provide business reply cards at educational events, mandating disclosure of the number of plans available, extending the reconnection time for agents with beneficiaries to 12 months, and permitting meetings without the full 48-hour cooling-off period under specific circumstances.

Moreover, CMS is considering aspects related to Medicare Advantage risk adjustment audit, etc., to explore the provisions of this final rule further.


The ultimate regulation incorporates a crucial element of the Inflation Reduction Act, designed to enhance access to cost-effective prescription drug coverage for around 300,000 low-income individuals. CMS is broadening the qualification criteria for the complete low-income subsidy benefit, commonly called “extra help,” extending it to individuals with incomes up to 150 percent of the federal poverty level. Commencing on January 1, 2024, this adjustment ensures that those currently eligible for the partial low-income subsidy will now be entitled to the total subsidy. This, again, may influence specific calculations related to Medicare Advantage Risk Adjustment. Consequently, eligible enrollees will incur no deductible or premiums (if enrolled in a “benchmark” plan) and benefit from fixed, reduced copayments for specific medications covered under Medicare Part D.


The conclusive regulation bolsters the network adequacy for behavioral health within Medicare Advantage (MA) by incorporating clinical psychologists and licensed clinical social workers into the evaluated specialties. These specialized professionals are also eligible for the 10-percentage point telehealth credit. CMS is solidifying standards for wait times concerning behavioral health and primary care services, along with more stringent notice requirements from plans to patients when these providers are removed from their networks. Furthermore, CMS mandates most categories of MA plans to integrate behavioral health services into their care coordination programs, ensuring that mental health care becomes an integral component of person-centered care planning.


CMS has expressed a steadfast commitment to advancing health equity for all, especially those historically underserved, marginalized, and adversely impacted by persistent poverty and inequality. The agency is providing clarity on existing regulations and expanding the range of populations that Medicare Advantage (MA) organizations must serve with cultural competence, including:

  • Individuals with limited English proficiency or reading skills
  • Individuals from ethnic, cultural, racial, or religious minorities
  • Individuals with disabilities
  • Individuals identifying as lesbian, gay, bisexual, or with diverse sexual orientations
  • Individuals identifying as transgender, nonbinary, or with diverse gender  identities, including those born intersex
  • Individuals residing in rural areas or regions with elevated levels of deprivation

 Individuals are otherwise affected adversely by persistent poverty or inequality. 

CMS highlights research indicating low digital health literacy, particularly among populations experiencing health disparities, which continues to hinder telehealth access and exacerbate care gaps, especially among older adults. The final rule mandates that MA plans establish and maintain procedures for providing digital health education to enrollees to enhance access to medically necessary covered telehealth benefits. CMS also elevates existing standards by requiring MA organizations to incorporate providers’ cultural and linguistic capabilities into provider directories. This change is expected to enhance the quality and accessibility of provider directories, particularly for non-English speakers, individuals with limited English proficiency, and enrollees who use American Sign Language. Lastly, CMS enforces that MA plans’ quality improvement programs include initiatives to reduce disparities.


The final rule introduces significant changes to streamline prior authorization requirements, focusing on minimizing disruptions for enrollees in Medicare Advantage (MA) plans. It mandates that approved prior authorizations remain valid for the duration of medical necessity, preventing interruptions in care. Annual reviews of utilization management policies by MA plans, aligned with CMS proposals, ensure healthcare professionals assess denials based on medical necessity. CMS proposes an electronic prior authorization system, shorter response times, and data exchange standards, enhancing efficiency and transparency. Applicable to various entities, the rule safeguards utilization management policies for MA enrollees’ equal access to necessary care, aligning with recent Office of Inspector General recommendations. CMS clarifies rules on acceptable coverage criteria, requiring adherence to national and local coverage determinations.

The rule permits MA organizations to formulate internal coverage criteria based on evidence, encouraging transparent clinical decisions. It introduces continuity of care measures, limiting disruptions during coordinated care plan transitions. CMS mandates a 90-day transition period without prior authorization requirements when switching plans during active treatment. The final rule emphasizes the essential role of MA plans in coordinating care and ensuring consistent access to medically necessary care for enrollees.


The final Risk Adjustment Data Validation (RADV) rule by the U.S. Centers for Medicare and Medicaid Services (CMS) intensifies regulatory scrutiny, necessitating healthcare organizations to ensure precise risk adjustment. RAAPID’S solution engineering expertise, incorporating accurate Natural Language Processing (NLP) in line with the Monitor Evaluate, Assess Treat (MEAT) framework becomes crucial for identifying clinical conditions and supporting evidence.

The imminent transition of the Medicare Advantage risk adjustment model from V24 to V28 underscores the need for technologies ensuring accurate and comprehensive health information capture.

Beyond the Medicare Advantage risk adjustment model, NLP technology integration offers substantial benefits across various healthcare scenarios. RAAPID’s AI-enabled analytics revolutionizes chart review operations by focusing on targeted precision, reducing chart retrieval requests, minimizing provider friction, and enhancing review effectiveness. AI-enabled HCC CAPTURE and HCC COMPASS provide comprehensive retrospective solutions using NLP and deep learning for Risk Adjustment Coding & Audit functions.

As a health plan decision-maker, it is vital to guarantee the precision, timeliness, and thoroughness of the health conditions reported in medical records.

In the face of a growing patient population, extensive healthcare data, and stricter regulations, adopting NLP technology emerges as a strategic move to optimize risk adjustment, maximize reimbursement, comply with regulations, improve operational efficiencies, enhance care coordination, and facilitate interoperability.

Source: DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 401, 405, 417, 422, 423, 455,


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Disclaimer: All the information, views, and opinions expressed in this blog are inspired by Healthcare IT industry trends, guidelines, and their respective web sources and are aligned with the technology innovation, products, and solutions that RAAPID offers to the Risk adjustment market space in the US.